Basil Read reports R1bn loss in full-year results

Cape Town – Construction engineering company Basil Read announced disappointing results for the year to end-December 2017 on Wednesday morning, saying revenue fell from R5.126bn in 2016 to R4.581bn in 2017.

The company has been working on its turnaround strategy as well as plans to reduce debt, finance operations and increase capital.

Basil Read announced it will issue 1.36 billion new shares at the beginning of March, hoping to raise R300m to this end.

In a frank account, the company in its audited provisional results said its liabilities outsized its current assets.

Regarding its status as a going concern, the company’s annual report statement said the group and company's results in the current year were significantly impacted by onerous loss-making legacy contracts, write-off of goodwill in the roads division and reversal of deferred tax assets in loss-making entities.

“As a result, the group reported a net loss after tax of R1bn for the 2017 financial year. Significant items in the loss for the year include provisions for onerous contracts of R208.7m, impairment of goodwill and reversal of deferred tax assets relating to the roads division of R261.1m and the write down of debtors and development land of R84.7m,” the statement said.

The company said in line with its September 2017 turnaround strategy, initiatives implemented by the group included a debt standstill agreement with funders and guarantors, the sale of non-core assets, renegotiating terms with funders, raising new capital and securing new profitable projects.           

“The group's balance sheet has been negatively impacted by the loss realised from operations. At year-end, the group's current liabilities (R2.1bn) exceeded current assets (R1.4bn) and the group's cash had decreased to R126.4m,” the statement said.

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